Using Your Forest for Retirement Income

It is easy to make money from your forest property. In fact, forestry in the South can compete or exceed the return of traditional investments. For example, a typical forestry investment after twenty-five years will often yield three times that of a bond or a savings account over the same period of time. Recent studies show that landowners that use Foresters in their management activity gain 40% more in revenue over time as opposed to those who don't. 87% of retired landowners don't use a forester or have a management plan? So why don't they, when it can mean more money?

So what if you don't have twenty-five years after planting trees before you would use your forestland as a retirement supplement. How about leaving your heirs a forest legacy?

Establishing a well managed forest is similar to developing a diversified investment portfolio. Your forest plan would be a reflection of your non-timber resources needs and acceptable the "risk" or likely return from the investment. Tree planting carries some uncertainty (seedling survival or competition) that is present in all natural systems. Poor survival or increased competition could reduce your timber investment yields. An experienced forester can advise and help you reduce risks by tailoring a reforestation plan or management plan for your investment needs and capabilities.

Lets review a couple of scenarios to determine where you might be in using your forestland as a retirement supplement.

Scenario 1
You have land that doesn't currently have a substantial amount of timber on it because of a recent harvest or you are in the process of converting it from farmland to forestland. First you need to check with a forester on establishing a reforestation plan. If you have not yet reached retirement age then you conceivably could acquire income from your timber through thinning at between eighteen and twenty years. Another thinning at twenty-five years and a harvest at thirty-five years. If you are retired already, reforestation for your heirs can be the ultimate legacy you can leave them.

Scenario 2
If you have forestland that is already mature, then you may harvest your timber to reap immediate benefits and income from your forestland and then reforest for your heirs. It is important to keep in mind that regardless of how use your forestland, consulting with a professional forester will increase the possibility of getting greater return today while maximizing your forest income in the future.